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Full text of "The_Emergence_of_Machine/Human_Organizations"

The Emergence of Machine/Human Organizations in the 
Context of Recent Advances in Information Technologies: 

A descriptive Historical Perspective 

1.0. - Introduction 

Tallc of Modernization often focuses on the Humanistic aspects of its 
effects on Social and Political Systems. In fact, most consideration is 
given to the anthropocentric features of modern Systems Management 
and Administration. For example, Allen C. Bluedorn, observed that: 

"Different Times produce different effects The effect was produced by 

an ingenious piece of technology invented in the thirteenth century- .... - 
That few residents of the twenty- first century have ever heard of, yet its 
effects were revolutionary. The invention was the Escapement, a device that 
converted the power of a clock into gear movements of equal duration. The 
escapement made the mechanical clock possible, and the mechanical clock 
revolutionized time And very much more. " ^ 




Hiw-i Figure from 
Pellaton, J.C. 
(1928) 



The ability to accurately maintain and measure time would have a 
significant effect on Human Social and Political Organization. In fact, 
David Landes has argued that next to fire and the wheel, the 
mechanical clock was one of the three technological innovations which 
had the greatest effect on Human Development. 

These individuals and others to a great extent, however, present 
anthropocentric views which while relevant for Human/Machine 
organization, will not be sufficient when applied to the newly emerging 
Machne/H jman Systems which can be seen appearing within the last 
few years. These developments do not bode well for the continued 



hegemony of the Human Centric Model for present day 
Human/Machine Organizations. Human Management at the 
governmental level in particular and to a great extent, that of large 
corporate organizations, has shown itself to be particularly incapable 
when decisions must be made concerning questions which involve 
'Systemic' or 'System-wide' problems. The primary factor governing 
this inability to cope with the ever increasing dependence on Machine 
and Information Technologies is a refusal on the part of those in 
management to give up their anthropocentric views governing the 
functioning of the modem Machine/Human Organization. 

During the 19'^^ and 20'^^ Centuries, particularly throughout the so-called 
Industrial Revolution, significant changes occurred relating to Human 
Organizations and how they were managed. In fact the ground work 
was being laid during this time-period, for the situation many large 
organizations (both Governmental and Nongovernmental) now find 
themselves in, within the so-called Industrialized States. Technological 
Innovation is now focusing on automation within the managerial levels 
of the Organization and with Outsourcing reducing the need for highly 
paid domestic workers, employee moral within most organizations can 
be considered at an all-time low, especially when one looks at the long- 
term prospects for most employees within the organization. 

This work will concern itself predominantly with the interface which can 
be defined as the transition from the Human-Centric Human/machine 
Organization, towards a Machine/human type Organization. One in 
which Humans are embedded within a Machine-network as compared 
to the previous Human/Machine Organization which over the years 
grew to consist increasingly of ever progressing Machine Technologies 
embedded within the Human Organization. Specifically we will look at 
the effect that the emergence of the Machine/Human Organization has 
had on unemployment and employment opportunities here in the 
United States. 

The employment situation can be considered of prime importance, 
since any prolonged trend in the direction of lower employment levels, 
underemployment, or reduction in salaries or compensation of workers, 
will have significant negative effects on both the Political and Social 
Systems here in the United States. 



This work will focus on the following: 



• Have there been significant changes in the organization of 
hunnans with regard to the systems which were organized to 
manage their labor? 

• What has been the response to these changes on the part of the 
management of these organizations? 

• Have these changes produced sufficient employment 
opportunities for those whose jobs have been eliminated during 
the evolutionary changes taking place in the modern 
Machine/human Organization? 

• During the so-called period of Industrialization which took place 
throughout Europe and the United States from the early 1800's 
to present, it was accepted by most economic and political 
experts that there was always a net gain in employment and the 
quality of that employment as new technologies were 
incorporated within the Economic System. In fact, it is still said 
today that we should not worry, since the same process will take 
place in response to the introduction of the new Information 
Technologies. Is this in fact the case? 

For the purposes of this work the American Labor Environment will be 
viewed from the perspective of a closed system; for example, jobs 
which have been outsourced outside of the United States will be 
considered as net job losses concerning the American Economy. Of 
course, when viewed from a global or macro perspective these may 
not be job losses; but job movement. However, the effect of 
outsourcing on the American labor market at this time is local and will 
be considered local for this current work. 

The two major areas which will be considered are: 

• The impact of the new technologies on management 
strategies and organization of the new Enterprise 
Systems 

• The Impact of these changes on the employment 
situation in response to these Systemic changes 

1.0.1. - Methodology 

Since this writer views History as a Descriptive Science, he will 
establish a somewhat rigorous set of rules governing the use of 
Terminology and the creation of relevant Categories of Analysis with 
which to present specific arguments. Any historical analysis must be 
reliable (as close to truth as is humanly possible); if one is to 
effectively describe the System under investigation. In fact, the basis 
for all analysis that is done within the Social Sciences lies on a 



foundation which involves sound Descriptive woric done by the 
Historian, for these purposes History will be utilized as a 'Science of 
Investigation' along similar lines to the methodological approach taken 
by Langlois and Seignobos in their classic work, even though their 
approach was to view history as strictly a "Science of indirect 
observation"^ . 

Their utilization of scientific methodologies for the analysis of Historical 
materials, "in both statement and practice, encourage historians to 
turn their emphasis away from interpretation to criticism of source 
materials"^. This work will not concern itself with interpretation of the 
statistical facts which were collected, but will critically analyze the 
methodologies used to collect the data and information upon which the 
conclusions were drawn concerning that information. Like wise, from 
the perspective of Systems Analysis, the managerial situation within 
the newly emerging machine/ human organizational systems will be 
looked at with respect to how the new Web Services and Automation 
Technologies are being used to automate all levels of Business 
Processes. 

The Descriptive Analysis will be Quantitative as much as is possible; 
and where qualitative judgments must take place, they will necessarily 
be based upon valid and consistent reasoning. 

1.1 - The Evolution of the Human Organization 

Throughout history, the structure of human organizations has changed 
little until the late 1800's and increasingly throughout the last century. 
A great part of the change has only taken place within the last 20 
years or so. As automation technologies were developed, their effects 
on the structure of human organizations would prove to be the most 
significant. Three phases can be identified relating to the evolution of 
Human Organizations to Human/Machine organizations and then with 
the advent of today's Machine/Human Organizations: 

I - The Human Organizational Phase - This phase was the 
longest historically and involved strictly Human-to-Human Interactions; 
and, limited interactions between Humans and the inanimate 
technological objects which primarily served as Tools and/or Weapons, 
This phase lasted from pre-historic times until the middle of the 20th 
Century. 



I - The HLiman/Human Organizational Phase 




II - The Human/Machine Organizational Phase - This involved 
the progressive Integration (as it could be called), of inanimate 
machines and technologies into Human Organizations, primarily at the 
Production and Management levels. Initially, as seen in Phase I, the 
tools and technologies were integrated at the level of individual 
workers or those in the military forces. As human/machine integration 
progressed, humans at increasingly higher organizational levels 
became more-and-more dependent upon the integration of machines 
and technologies into the Human Organization. The key differentiation 
between Phases I and Phase II is this notion that the humans in the 
organization became dependent on technologies to the extent that 
they could no longer function as individuals outside the context of the 
Human/Machine Organization, while performing theirjobs. 

II - Ttie Human/Machine OrQanizalional Phase 




During both Phase I and Phase II, the Human and Machine Elements 
could easily be separated from the Organizational context and 
described through the specific parameters and characteristics related 
to their natures. From a Systems Perspective, the Elements could be 
separated and studied independently from the Human Organizations 
which they were representative of. 



Ill - The Machine/Human Organizational Phase 

III -The Machine/Human Ofgenizational Phase 




The primary parameter which differentiated the Machine/Human 
Organization from its predecessors is that one cannot study 
Machine/Human Systems by separating out their Human and Machine 
Components and studying them individually. The behavior of these 
systems is largely a function of the interaction between the 
components and less a function of the behavior of each individual 
component. For the most part, changing the behavior of individual 
components of the system will not cause a predictable change 
regarding the entire Machine/Human System. No matter how much 
some of us may dislike the concept of the Machine/Human 
Organization, it has appeared and is increasingly pervading the 
Economic and Social Systems in Western Societies. 

This idea of Humans embedded in a Machine/Human System is the 
prime concept behind advances in Web- Services and Business-to- 
Business transactions in the Enterprise Resources Network (ERP) of 
today. We can only address the Machine/Human System Concept from 
the perspective of an understanding of how Generic Systems Function.'^ 
Historical analyses in almost all cases deal with complex 



Human/Human, Human/Machine, and Machine/Human interactions 
within the context of a Complex System. Therefore, no analysis or 
Historical Interpretation could be useful without first establishing the 
context for the Environment which will be used for the analysis itself. 
Methodological rigor must be established otherwise inteilectual 
dialogue will amount to little more than 'story-telling'. The 
methodological bases for this work will therefore rest with the 
foundation which is laid out In the attached Appendices I and II. 



1.1.1 - The Evolution of the Human/Machine System 

from an Information Technology (IT) Perspective 

The relationships between Humans and the Technologies which 
facilitate the functioning of the Machine/ Human Systems which will be 
discussed must be described so as to describe the bases which the 
analysis will rest upon. Like most system processes, there is a type of 
evolutionary process which can be associated with various stages 
which have culminated in the instantiation of the current 
Machine/Human Systems of today. This process is analogous to what is 
seen in Self-organizing Systems in the Physical and Natural Sciences. It 
involves the appearance of several distinct stages or phases:^ 

Phase I - Humans use machines to create messages and physically 
deliver them to other humans. For example, a Human may type a 
letter and mail it to another Human. The delivery of the message 
(letter) involves purely physical transactions between humans and 
their equipment. While being transported the message (letter) is not 
electronically altered or encoded. 

Phase I - The Hiirnan/Machine System fiom ar> IT Perspeclive 



Message 





Phase II - Humans interact with machines which then format, 
electronically encode, and send messages which are received by other 
machines which electronically decode and reformat the message which 



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is then read by other humans (e.g. Email). Humans are not physically 
involved in any stage of the message sending/receiving process. 

Pheee II - The Humsn/Mettiine System froni an IT Perspective 




Phase III - Humans fill out templates which provide a general format 
for messages; machines then create the messages and interact with 
each other without human intervention. In this phase the entire 
process from message creation to the answering of the message is 
automated. Machines interact with each other through services which 
are exposed to the world or to specific clients designated for that 
process. Humans do not necessarily have to even look at the messages 
as they did during Phase II. This is the formal Web Services 
Environment in which Machine/Human Systems are increasingly 
functioning today. ^ 

Phase I'll ITieHumpn/MgcKne System from an IT Perspective 




1.2 - Job Creation versus Job Destruction - It should be 
understood, that during the Human/Human and Human/Machine 
phases of Human Organizational Development; while new technologies 
tended to displace workers and employment categories (sometimes 



significantly as during the Industrial Revolution); they did not reduce 
total or overall employment opportunities and often were found to 
increase the total employment base. The new technologies underlying 
the Machine Human System however, have and wiil, significantly 
reduce vast numbers of workers to the low-skilled, lower-paying under- 
employed sectors of our economic and social systems, at best. And, 
most probably, significantly reduce over-all employment levels 
permanently; beginning in the so-called Highly-industrialized states of 
the West, as an increasing number of high-skilled jobs are outsourced 
overseas to much lower-paying economic sectors. 



1.3 - Brief Time-line and History for the Employment 
Sector of the American Social and Economic System - 

1600's to 2002 - Very little had changed regarding the 
progressive integration of the various technologies into Human 
Organizations. The point at which the Change occurred from 
Human/Machine to Machine/Human Organization probably can 
be considered as the point where Human dependence on the 
various man-created technologies was so great that the 
Human Organization could not function without its 
machine/technologies.: 

• Tool and Weapon technologies all progressed, allowing 
Human/Human Organizations to evolve Centralization of 
Resource management and Employment Specialization. This led 
to the appearance of the Human/Machine Organization, which 
increased significantly, Human dependence upon the various 
man-made technologies. 

• Tool, Weapon, and Commodity production Technologies increase 
output to the point where tower costs allow greater distribution 
of these goods. Production and manufacturing employment 
opportunities greatly increase. 

• Production Automation causes significant employment loss in the 
Manufacturing sector of the Economy; but, a parallel increase 
was seen in associated production and distribution sector service 
employment. 

• Automation technologies target Middle Management, causing 
significant losses in employment for that sector. Outsourcing of 
Middle Management jobs begins. 

Late 2002 to early 2003 - 



Present technologies increasingly automate and target Service 
(predominantly Management) sector, moving into analyst and upper 
management positions. We see the first reduction in Service Sector 
employment in the United States since that sector was recognized 
(40-50 years ago). New jobs or employment opportunities (specifically 
of a permanent nature) do not appear in the United States in any 
significant number related to the number of positions which had been 
eliminated. During this time period 'outsourcing' of highly skilled 
service sector jobs helps accelerate service sector job loss. 



2.0. - The Real Labor Picture in tlie United States today 

Understanding economic statistics can sometimes be difficult, unless 
one is aware of the potential biases which may be present regarding 
the sources which are being used for presenting the statistics to the 
public. Thus when we hear that 'the economy has grown at an adjusted 
rate of 8.2%' and that 'inflation is down to 1.2%'; we must carefully 
look at the adjustments and bases used during the preparation of this 
information. In order for economic developments to be viewed in a 
proper historical context, these adjustments and bases must be 
normalized over time periods under study so we can have a consistent 
understanding of what is really going on. Since government officials in 
particular, are constantly changing these parameters, it makes it 
difficult to compare what is being said or proposed at different times. 

Significant parameters which often enter into economic discussions are 
(all of them can be misleading if the changing nature of the 
parameters used in their calculations are not understood): 

• GDP or Gross Domestic Product 

• CPI or Consumer Price Index and Inflation Rate (related to CPI) 

• Employment and Unemployment Rates 

2.1. -GDP 

Gross Domestic Product can be calculated with three approaches, each 
has its own inherent biases. Unfortunately the average human never is 
told or knows what these parameters are. This leads to all sorts of 
misleading perceptions concerning the economy. 

2.1.1. - Product Approach (Value-Added Approach) 

The sum of value added to goods and services in production in the 
economy. We add the value of all goods or services produced in the 
economy and subtract the value of all intermediate goods (goods used 
in the production of another good). (See any good economics text for 
this and subsequent GDP related definitions). 



10 



The problem with this approach is the nature or meaning of value. By 
definition it is subjective and can be manipulated for which ever 
purpose the user desires. In particular government definitions vary 
throughout the years (See Bureau of Labor Statistics Documentation). 

2.1.2. - Expenditure Approach 

GDP = Total expenditures on all final goods and services throughout 
the economy. This is the approach often used by government officials 
since it includes Governmental expenditures at all levels (20 - 50% of 
the GDP depending how one calculates direct and indirect government 
expenditures, i.e. so-called privatization which includes quasi-public 
organizations such as the Port Authority, Post Office, etc 



2.1.3. - The Income Approach 

GDP=AII Incomes received by economic agents contributing to 
production. This approach suffers the same fate as the expenditure 
approach concerning government and quasi-public organizations. 

2.1.4. - GDP as an Indicator of Economic Progress 

GDP is not a good measure of wealth since it ignores the distribution of 
wealth. Thus factors such as average income increasing can hide the 
fact the over the last 10 years this was increasingly related to a much 
greater growth in the high income brackets than over the 
predominantly middle to lower income brackets. As we will see when 
we examine the employment situation, the loss of higher paying jobs 
through outsourcing and automation and there replacement (if they 
are indeed being replaced) with lower paying jobs, is increasing the 
inequality. In fact there is a definite bi modal distribution concerning 
income as a function of individuals in the labor force. The often quote 
'GDP and per-capita income has increased' merely disguises the fact 
that Per-capita income is merely a measurement which divides the 
total population by the total GDP for an economy. 

The recent announcement of a significant 2.4% growth in GDP was 
promoted as the result of good government policy, when in fact what is 
hidden in the statistics is the fact that over 50% of this growth can be 
directly attributed to the Iraq Wartime government expenditures. In 
fact the Federal Governments component of the GDP alone increased 
by 25% during that same time period (this does not include significant 
State government expenditures also. This is an example of claiming 
that a cost (wartime expenditures} is actually economic growth when it 
is clearly and expense. In 2001 and 2002 the government component 



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of the GDP was growing at a rate over 4% yearly, while the private 
sector component was growing by less than 1.0%. Throw in the 
increasing unequal distribution of wealth and for a large segment of 
the population, there has been no economic progress/ 

2.3. - Consumer Price Index and Inflation Rate 

This factor attempts to calculate the prices of consumer goods, It 
measures the change in cost of a fixed basket of goods. This cost is 
based upon the Inflation Index which unreliably has been changed 
several times over the years. Presently it does not include the cost of 
Fuel or transportation. A low CPI favors the Government at the expense 
of pensioners and taxpayers, since Social Security and many pensions 
are based upon the growth of the CPI. 



2.4. -Employment and Unemployment Rates 

U.S. Department of Labor Definitions: 

• Civilian noninstitutional population Included are persons 16 
years of age and older residing in the 50 States and the District 
of Columbia who are not inmates of institutions (for example, 
penal and mental facilities, homes for the aged), and who are not 
on active duty in the Armed Forces. 

• Civilian workers (National Compensation Survey) The 
National Compensation Survey defines Civilian Workers as the 
sum of all Private Industry and State and Local government 
workers. Federal Government, Military and agricultural workers 
are excluded. 

• Employed persons (Current Population Survey) Persons 16 
years and over in the civilian noninstitutional population who, 
during the reference week, (a) did any work at all (at least 1 
hour) as paid employees, worked in their own business, 
profession, or on their own farm, or worked 15 hours or more as 
unpaid workers in an enterprise operated by a member of the 
family, and (b) all those who were not working but who had jobs 
or businesses from which they were temporarily absent because 
of vacation, illness, bad weather, childcare problems, maternity 
or paternity leave, labor-management dispute, job training, or 
other family or personal reasons, whether or not they were paid 
for the time off or were seeking other jobs. Each employed 
person is counted only once, even if he or she holds more than 
one job. Excluded are persons whose only activity consisted of 
work around their own house (painting, repairing, or own home 
housework) or volunteer work for religious, charitable, and other 
organizations. 



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• Unemployed persons Are persons 16 years and over who had 
no employment during the reference week, were available for 
work, except for temporary illness, and had nnade specific efforts 
to find ennp!oyment sometime during the 4-week period ending 
with the reference week. Persons who were waiting to be 
recalled to a job from which they had been laid off need not have 
been looking for work to be classified as unemployed. 

• Unemployment rate 

The unemployment rate represents the number unemployed as a 
percent of the labor force. 

Factors such as the definition of employed worker as someone on 
active duty even though they are not working at their regular job, may 
not come back to that job, and may currently be replaced by another 
worker, skews employment figures higher by doubling the apparent 
employment value of individuals on active duty. Employed aliens or 
citizens of other countries are also considered as employed for the 
purpose of calculating the participation rate or proportion of the 
population which is in the labor force; but they are not included in the 
Civilian Institutional population upon which the total unemployment 
rate is calculated. This skews the employment rate higher, even 
though American citizens are not being employed in those positions. 

Perhaps the most significant parameter which is hidden to most people 
is the actual rate of unemployment. The bases for this calculation have 
undergone significant changes over the last 5-10 years. During June of 
the year 2000, the total number of employed individuals was 132,998, 
while as of May of 2003 this number had dropped to 130,067. During 
this time the total of those not in the labor force but eligible to actually 
work had gone from about 69,000 to nearly 78,000 individuals. This 
equates to a figure of about 38% of the actual employable Civilian 
population as not working. How this gets publicized as a figure 
approaching 5.9% is a topic of another bit of work. Suffice it to say that 
there is so much 'wiggle-room' within the parameters used to calculate 
unemployment rates in the United States, that believing anyone's 
figures may require one to 'suspend belief. ^ 

It is clear from the Government's own statistics that over the last ten 
years, while the number of jobs has been increasing, the total number 
of people entering the employable population has increased at a more 
rapid rate. This in addition to an increasing number of non-citizen 
employees has actually increased the gap between the number of 
eligible employable Americans and the total number of jobs filled or 
available. Since January of 2000 the total number of people employed 
in the United States has actually decreased by over 3,000,000 jobs. 
Additionally, ignoring the high income of the top 10% of the 



13 



population, the actually average salaries of most workers have 
significantly decreased during those Three years. 

Finally, under the rubric of the much talked-about efficiency of 
American workers lies the nasty truth that while previously efficiency 
had been tied to new technologies and automation; today, increasingly 
it is being tied to laying off workers and forcing the remaining workers 
to not only work harder, but work longer hours without additional 
compensation. 



3.0. - Significant clianges in the nature of the 
management of Machine/human Organizations 

From my direct experience I have seen over a 30% reduction in 
staffing where I work (as a Systems Administrator); and from direct 
observations in the field this is not exceptional. This is the direct 
replacement of highly skilled human jobs through the various 
automation technologies. The nature of the Web Services revolution is 
just now starting to automate the actual components of the Business 
Process Model. Increasingly over the last three years there can be seen 
various moves to eliminate as many human interactions with the 
business process components of the system as is possible. From the 
perspective of the highly skilled members of the workforce this will be 
bad news since once technology is used to automate middle and upper 
management components of the Business Process; these jobs will 
never return in the numbers which were seen just three years ago 
since they will not be needed to run such increasingly automated 
systems. Evidence of this phenomenon is becoming increasingly 
apparent throughout the Information Technology Services Sector. 

4.0. - Conclusion 

Direct evidence clearly points in the direction that: 

• Outsourcing of a high number of skilled jobs to areas outside 
of the United States is having a significant effect on the highly 
skilled IT Services Sector of the economy. Before the year 2000 
most outsourcing affected strictly jobs in the manufacturing 
sector; which makes up less than 15% of the total American 
Work force. Since 2000 however, an increasing number of those 
positions being outsourced represent losses from the highly 
skilled, highly paid IT and other services sectors, which make up 
nearly 80% of the American Work Force. The question of 'will 
outsourced jobs ever return' instead will be 'how can outsourced 
jobs ever return'? 



14 



• The so-called efficiency phenomenon has increased hours work 
and nnade many workers work harder without increased 
compensation. Due to the highly competitive nature of the Global 
Economy 'how will this situation ever return to what it was a 
mere three years ago'? 

• There is no question that the evolution towards a 
Machine/Human form of organization is eliminating the need for 
human interaction if the operation of the System and its 
processes. 

The final question will be 'how can jobs currently being eliminated by 
the above three parameters here in the United States, be replaced by 
at least equivalent type positions? That question is not for the historian 
to decide; however the evidence presently available, even under the 
most optimistic scenario, does not bode well for the future. 



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Appendices: 
Appendix I: 



16 



Appendix II 



17 



Appendix III 



18 



Appendix IV 



19 



20 



' The Human Organization of Time: Temporal Realities and Experience Allen C. Bluedorn, Stanford 

California: Stanford University Press, 2002, page 16. 

- Introduction to the Study of l-listory Charles V. Langlois and Charles Seignobos, London: 

Duckworth and Company, 1898, paraphrasing the translated Preface to the Work. 

' Maritain and the Revitatization of Meta History: Bergson vs. Positivism Thomas E. Schaefer and 

Colbert Rhodes, Quaterly journal of Ideology, Volume 25, 2002, numbers 3,4. 

"■ See Appendices I and II 

' When Can we call a System Self Organizing Carlos Gershenson and Francis Heylighen, 

electronically published, Centrum Leo Apostel, Vrije Universiteit, Brussels, Belgium; ] 

http://www.vub.ac.be/CLEA also see Appendix III. 

^See Appendix IV 

^ Stephen Moore and Phil KerpenThe Washinolon Times Comnienlary 13 December, 2003; based upon US Government 

Economic Statistics. 0MB and Depattment of Labor.). 

" United States Bureau of Labor Statistics http://www.bls.gov/